Correlation Between Cambium Networks and Cytta Corp

Can any of the company-specific risk be diversified away by investing in both Cambium Networks and Cytta Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cambium Networks and Cytta Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cambium Networks Corp and Cytta Corp, you can compare the effects of market volatilities on Cambium Networks and Cytta Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cambium Networks with a short position of Cytta Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambium Networks and Cytta Corp.

Diversification Opportunities for Cambium Networks and Cytta Corp

0.55

Correlation Coefficient

Cambium Networks  Cytta Corp

Very weak diversification

The 3 months correlation between Cambium and Cytta is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cambium Networks Corp and Cytta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytta Corp and Cambium Networks is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cambium Networks Corp are associated (or correlated) with Cytta Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytta Corp has no effect on the direction of Cambium Networks i.e., Cambium Networks and Cytta Corp go up and down completely randomly.

Pair Corralation between Cambium Networks and Cytta Corp

Given the investment horizon of 90 days Cambium Networks Corp is expected to under-perform the Cytta Corp. But the stock apears to be less risky and, when comparing its historical volatility, Cambium Networks Corp is 1.61 times less risky than Cytta Corp. The stock trades about -0.09 of its potential returns per unit of risk. The Cytta Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.80  in Cytta Corp on December 2, 2024 and sell it today you would lose (0.30) from holding Cytta Corp or give up 10.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cambium Networks Corp  vs.  Cytta Corp

Cambium Networks Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cambium Networks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Cytta Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cytta Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Cytta Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cambium Networks and Cytta Corp

The main advantage of trading using opposite Cambium Networks and Cytta Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambium Networks position performs unexpectedly, Cytta Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cytta Corp will offset losses from the drop in Cytta Corp's long position.

The idea behind Cambium Networks Corp and Cytta Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.